Blue Spruce is a large wholesale gardening operation that sells trees, shrubs, and a variety of perennials and other bedding plants to small retail garden shops throughout New England. The company is split up into three major responsibility centers: Trees, Shrubs, and Bedding Plants. Tim Conway, president of Blue Spruce, has decided he would like to start comparing the performance of his responsibility centers so he knows where he needs to spend his management time. He collects the following information about the three responsibility centers.

REQUIRED:

a. Develop a line item variance analysis for the three divisions of Blue Spruce.

b. Plot the variances on a bar graph.

c. Using percentages, develop an analysis of the percent of cost and profit for the three divisions. Use the budget as your divisor in this exercise.

d. Which division looks like it is performing the best? Why?

e. Where should Tim spend his management time?

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Blue Spruce Actual vs. Budget Budget Actual Budget Actual Budget Actual Budget Actual Trees Shrubs Bedding Plants Company Totals Sales Revenue $1,200,500 $1,189,200 $995,800 $1,020,800 $853,400 $900,600 $3,049,700 $3,085,600 Less: Cost of Goods Sold $58,245 $564,870 $497,900 $494,846 $401,098 $463,809 $1.487.243 S1,526,579 Gross Margin $612,255 $624,330 $497,900 $525,954 $452,302 $436,791 $1,562,457 $1,559,021 Less: S6&A Expenses $360,150 $374,598 $278,824 $289,765 $273,088 $263.876 $912,062 $917,298 Income Before Tax $252,105 $249,732 $219,076 $236,189 $179,214 $172.915 S650,395 $641,723